The RBI recently came out with an announcement. The announcement declared a new framework to be released for SROs. Also, from now on the SROs are recognized bodies that will help in policy making and building up a compliance culture.
What Are SROs?
SRO stands for a Self- Regulatory Organization. These are usually private organizations that are subject to a certain degree of government regulations despite being a privately controlled entity.
What Powers Do They Have?
These SROs also command a certain amount of influence and power over a particular industry or profession as such. These generally help monitor if a particular firm or industry is able to stick to certain guidelines and norms or not. They also serve as a watchdog and keep an eye out for fraudulent or unprofessional practices or activities.
What Did The RBI Say?
Now that SROs are recognized, they will be expected to work under a certain framework. They will now have to come up with certain codes and practices that are prescribed by the RBI and which the members have to adopt.
The Self-Regulatory Organizations will also contribute to improve the sectors that they are representative of and bring into light the major concerns faced by them. They will also establish rules of conduct and benchmarks for them and closely monitor the industry. They will also come together with the RBI to ensure that any regulatory non-compliance is caught and necessary actions are taken at the earliest.
The SROs will ensure compliance and high standards of industrial practices.
Powers Of RBI
The RBI, however, still holds the power to withdraw the recognition it has granted. This might happen in the event of the SROs resorting to unprofessional or harmful practices to the public.
